Mexico independent presidential candidate quits; peso gains

3 Min Read

MEXICO CITY (Reuters) - Mexican independent candidate Margarita Zavala on Wednesday withdrew from the July 1 presidential election, potentially boosting the second-placed contender, a former colleague in the center-right National Action Party (PAN).

Independent presidential candidate Margarita Zavala gestures as she speaks during the 16th National Tourism Forum at the Chapultepec Castle in Mexico City, Mexico May 7, 2018. REUTERS/Carlos Jasso

In an interview with broadcaster Televisa, Zavala, who has been trailing in polls, said she was quitting the race out of “political honesty.”

The peso currency rose against the dollar after the news became public, with traders saying the rise may have reflected beliefs that Zavala’s withdrawal would benefit a business-friendly candidate.

Jorge Guajardo, a close adviser to Zavala and former Mexican ambassador to China, said that Zavala would not be throwing her support behind any of the remaining candidates.

Zavala, the wife of former Mexican President Felipe Calderon, was once one of the favorites, but her support has fallen away since she opted to run a solo campaign.

A survey published on Tuesday by polling firm Consulta Mitofsky said Zavala had the backing of 2.7 percent of voters, placing her last in a field of five contenders.

Leftist Andres Manuel Lopez Obrador has a strong lead in most polls, and was running more than 12 percentage points ahead of his closest rival, Ricardo Anaya, in the Mitofsky survey.

Anaya, a former chairman of the PAN, is running for a right-left alliance. Zavala was a member of the PAN until she quit to run as an independent last October, complaining that the party leadership had thwarted her presidential aspirations.

The Mexican peso MXN=D2 extended gains to a session high against the dollar, rising around 0.7 percent against the dollar, after Zavala's decision became public.

Some traders said the peso may have risen because Zavala’s withdrawal helped Anaya, who is regarded as closer to the business establishment than Lopez Obrador.

“This is the market over-reacting. (Lopez Obrador) has too much of an advantage,” said Pedro Tuesta, an economist at Continuum Economics. “The fact that the ticket has got smaller makes things harder for Lopez Obrador.”

Soon after the news, Anaya took to Twitter to praise Zavala as a “courageous woman” and pay tribute to her campaign.

Though support for Zavala was modest, her departure does remove one factor of uncertainty from the election.